Trade Secrets vs. Patents Part 2

Now that you have a better understanding of the differences between a trade secret and a patent,* which one is better for you?

The decision whether to obtain a patent or maintain an invention as a trade secret must be considered in light of the circumstances and facts of each individual case.

For example, obtaining a patent is generally the better option if the invention is likely to be invented independently by another or can be “reverse engineered.” By patenting the invention first, you can enjoy a legally-recognized monopoly on the invention for a substantial period of time.

On the other hand, a trade secret may be the better option in other situations, such as where you have developed a formula or process for making a product that cannot be reverse engineered easily. A classic example is the formula for Coca-Cola. If the owners had patented the formula in 1886 when it was first used, competitors would have been free to copy the formula after the patent had expired. By maintaining the formula as a “trade secret,” Coca-Cola has continued to derive an economic benefit from the formula to this day.

Furthermore, trade secrets are the only viable option where the secret concerns things that are not patentable, such as customer lists or business methods.

Making the best decision on how you protect your intellectual property requires careful consideration and weighing of all factors and circumstances relating to your invention and how to derive the most benefit from it. Because of the complex issues involved and long-term consequences at stake, it is recommended that you consult with an experienced intellectual property attorney to help you navigate through the decision-making process.

*For a discussion on the differences between trade secrets and patents, please see the post from Friday, June 14.

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